Financial Daily from THE HINDU group of publications
Tuesday, Jun 06, 2006
Financial Daily from THE HINDU group of publications Tuesday, Jun 06, 2006 |
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Pharmaceuticals Corporate - Alliances & Joint Ventures Glenmark forges risk-sharing deal for US with Paul Royalty Our Bureau
The deal Paul Royalty will finance product development through milestone payments to GPI over the next two years. In return, Paul Royalty will receive a royalty on net sales for these products.
Mumbai , June 5 Glenmark Pharmaceuticals has struck a risk-sharing financial deal with Paul Capital Partners' Royalty Fund, where the healthcare fund would invest $27 million to finance the development of 16 dermatological products by Glenmark for the US market. The deal has been forged through Glenmark's wholly owned subsidiary in the US, Glenmark Pharmaceuticals Inc (GPI). Paul Royalty will receive undisclosed royalties on net sales following the US Food and Drug Administration approval and launch of each product, said Mr Glenn Saldanha, Managing Director and CEO of Glenmark. Glenmark will be responsible for pre-clinical development and manufacture of the products, besides filing abbreviated new drug applications [ANDAs] and taking care of marketing the product, post-approval. Paul Royalty will finance product development through milestone payments to GPI over the next two years. In return, Paul Royalty will receive a royalty on net sales for these products, with the percentage varying by product and performance. Glenmark has already received its first payment, Mr Saldanha said, refusing to divulge details. The bulk of the payment would come in before the filings are made, he added. Typically, royalties in similar deals are about one-third the net sales, he indicated.
Product basket
The basket of derma products under this deal would be topical creams, ointments and lotions; the combined revenues are worth $1 billion. There would also be some para IV filings too, he said, indicating that some products could be open to litigation. However, he was unwilling to spell out the litigation risk. Clinical trials for two of the products have already been initiated and ANDA filings are expected to commence by end-2006 and continue over the next two years.
Related Stories: More Stories on : Pharmaceuticals | Alliances & Joint Ventures | Health
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